Capital and regulation

Solvency II and IFRS 17 are two major pieces of regulation that should be front of mind for many organisations working in insurance, as well as governments, and national and international regulatory bodies.

In general, Solvency II applies to EU-licensed entities, notwithstanding anomalies where it’s less of an issue such as Switzerland. Other major EU markets, along with a clutch of non-EU states, are building their prudential frameworks for Solvency II. It is unlikely to affect bigger non-EU countries such as the US, China and Australia.

Similarly, IFRS will affect markets that use the standard, with those aligned to GAAP (general accepted accounting principles) less inclined to see IFRS as a threat.

As markets get to grips with capital requirements and accounting/financial reporting regulation, Axco will continue to consider and collate the latest developments for a quick-stop guide to all essential laws. Read on to discover more about the proposed 2023 review of Solvency II and the introduction of IFRS 17, and how individual nations are responding to new obligations.

Capital and regulation

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Regulatory and reporting changes are rife in many regions, none more so than the EU’s Solvency II framework and IFRS 17 reporting rules.

Solvency II – set to be reviewed in 2023 – means insurers will be able to release more capital, but authorities will expect them to take a greater stake in public infrastructure projects or government debt.

IFRS 17 meanwhile, implemented in January 2023, introduces reporting standards that have the capacity to reveal more information about assets and liabilities.

In this section, we share Axco’s summary of the regulations and offer a Solvency II comparison between two markets’ approaches to implementation and compliance.

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